The contribution of the Black Sea Economic Co-operation organisation to regional development
SEER : Journal for Labour and Social Affairs in Eastern Europe
25 - 33
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Prior to the disintegration in the late 1980s of the Soviet bloc and then the Soviet Union itself, most of the economies in eastern Europe were members of CMEA/COMECON (the Council of Mutual Economic Assistance) that was formed to divert trade away from the market economies in the west.1 The development, under Soviet planning, of strong input-output linkages between industries in different countries/republics led to a signifi- cant degree of complementarity between member economies. This complementarity successfully diverted trade away from non-members, facilitating the maintenance of high degrees of in-bloc self-sufficiency. The feasibility of barter trade between members also contributed to this process by helping these countries overcome their hard currency constraints (Gultekin and Mumcu, 1996). Following the collapse of the Soviet bloc and hence of CMEA, the ex-Soviet republics gained independence while the formerly so- cialist nations of eastern Europe became exposed to competition for global markets amongst the market economies. A considerable portion of trade in these markets was controlled by regional trade blocs. So, when Turkey - then perceived to be a regional power with a relatively well-functioning market economy - called for the formation of a regional economic co-operation zone between the countries around the Black Sea in 1990, Armenia, Azerbaijan, Bulgaria, Georgia, Moldova, Romania and Russia imme- diately responded by sending representatives to Ankara, Turkey to discuss the project.